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I'D LIKE TO CALL THE MEETING OF THE FINANCE AND AUDIT COMMITTEE OF THE UCHIN COUNTY BOARD OF SUPERVISORS TO ORDER.UM, FIRST ITEM ON THE AGENDA WOULD BE THE PRESENTATION OF THE FISCAL YEAR 2024 AUDIT REPORT FROM PB MAYORS PRESENTATION.
NO, BUT THEY'VE GOT A HARD COPY.
OH, NO, THEY, NO, THEY DIDN'T.
I THOUGHT, WELL, I APOLOGIZE FOR NOT HAVING A HARD COPY TO PUT IN FRONT OF YOU.
UM, I HAVE A PRESENTATION, BUT I HAVE MOST OF IT MEMORIZED, SO, UM, I'M STILL GONNA BE ABLE TO DELIVER THE AUDIT REPORT.
UH, I'LL START WITH, UH, THE, THE HIGH LEVEL OF WHAT YOU WANT TO HEAR.
WE ISSUED AN UNMODIFIED OPINION ON THE FINANCIAL STATEMENTS.
THAT'S THE ONE YOU'RE LOOKING FOR.
UM, WE ALSO ISSUED A NO FINDINGS REPORT FOR INTERNAL CONTROL, OR INTERNAL CONTROLS AND COMPLIANCE, UM, AND AS WELL AS A REPORT WITH NO FINDINGS FOR YOUR FEDERAL DOLLARS.
SO ALL THREE OF THE OPINIONS THAT WE'VE PUT OUR SIGNATURE ON ARE CLEAN OPINIONS FOR THE COUNTY OF GOLAND.
UM, IN PERFORMING THE AUDIT ITSELF, WE HAD NO AUDIT ENTRIES.
WE HAD NO PAST ADJUSTMENTS FOR THE COUNTY, THE SCHOOL BOARD OR THE EDA.
THAT MEANS THE RECORDS AND EVERYTHING THAT WERE PROVIDED TO US TO PERFORM OUR AUDIT, UM, WE DIDN'T FIND ANYTHING THAT NEEDED ANY TYPE OF ADJUSTMENT TO, TO CORRECT THOSE ITEMS. UM, DURING THE AUDIT, WE DO A LOT OF OBSERVATIONS.
UM, ALL OF THOSE THINGS WERE PROVIDED TO US TIMELY.
UM, ALL OUR QUESTIONS WERE ANSWERED FULLY, AS NEAR AS WE CAN TELL.
AND SO THE AUDIT ITSELF WENT VERY SMOOTHLY.
UM, IN THINKING THROUGH SOME OF THE OTHER ITEMS THAT WE ARE REQUIRED TO COMMUNICATE TO, TO THE FINANCE AND AUDIT COMMITTEE, UM, INDEPENDENCE IS ALWAYS A BIG ISSUE AND SOMETHING THAT WE TAKE VERY CLOSE TO HEART.
WE DID NOTHING THAT WE'RE AWARE OF THAT WOULD CAUSE ANY INDEPENDENCE ISSUES.
THERE'S NOTHING THAT WE KNOW OF THAT YOU ALL HAVE DONE THAT WOULD'VE CAUSED ANY TYPE OF INDEPENDENCE ISSUES.
UM, AND US RENDERING OUR OPINIONS AS WELL.
UM, THE SINGLE AUDIT ITSELF, WE AUDITED TWO DIFFERENT PROGRAMS THIS YEAR.
UH, AND, UM, WE HAD NO FINDINGS WITH THOSE.
IF YOU'RE CURIOUS OF WHICH PROGRAMS IT IS THAT WE AUDITED, UM, THEY'RE LISTED ALL THE WAY IN THE VERY BACK.
ON PAGE 1 77, WE LOOKED AT SOME CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS, WHICH EVERY LOCALITY IS STILL SPENDING THOSE FUNDS.
UM, AND WE'RE REQUIRED TO IDENTIFY THOSE AS HIGH RISK.
THEY'RE, THEY'RE AT THE BOTTOM OF THAT PAGE.
AND THEN THE CLEAN, UM, SCHOOL BUS PROGRAM, I THINK IT WAS A NEW ONE FOR US.
I DON'T THINK WE'VE EVER AUDITED THAT ONE HERE BEFORE.
THAT WAS A NEW PROGRAM AS WELL.
UM, SOME OF THE OTHER ITEMS, YOU KNOW, WE FOLLOW WHAT'S CALLED THE YELLOW BOOK, WHICH IS THE GOVERNMENT AUDITING STANDARDS TO PERFORM OUR PROCEDURES.
UM, WE ALSO FOLLOW THE UNIFORM GUIDANCE IN DOING THE SINGLE AUDIT WORK.
AND OF COURSE, THE AUDITOR OF PUBLIC ACCOUNTS OUT OF RICHMOND HAS THEIR AUDIT SPECIFICATIONS AND ITEMS THAT THEY WANT US TO FOLLOW AS WELL.
SO WE WERE ABLE TO DO THAT, UM, WITH NO ISSUES OR FINDINGS WITH WITHIN ANY OF THAT TESTING AS WELL.
UM, BESIDES THIS DOCUMENT, THERE ARE OTHER ITEMS THAT WE WORK ON OUTSIDE TO COMPLETE EVERYTHING THAT HAS TO BE DONE.
UM, THERE ARE AN EXAMINATION REPORT THAT GOES IN FOR THE VRS AND RETIREMENT PROGRAMS, UM, FOR THE, THE STATE TO ISSUE THEIR OPINION, UM, THAT THEY THINK THAT THE VRS ALLOCATIONS AND THINGS OF THAT NATURE ARE, UM, BEING DONE ACCURATELY.
THEY RELY ON ALL THE LOCAL GOVERNMENT AUDITORS TO DO THAT TESTING FOR THEM.
SO THAT WORK WAS DONE ALREADY BEEN SUBMITTED TO THE STATE.
UM, THERE WILL BE A DATA COLLECTION FORM THAT WILL STILL NEED TO BE FINISHED, I BELIEVE THAT DEALS WITH THE, UM, FEDERAL DOLLARS.
SO THAT'S STILL TO BE FINISHED.
UM, WE'LL DO A DEQ LANDFILL UPDATE AS WELL.
SO THAT WILL IS STILL TO BE DONE.
UM, AND THEN OF COURSE, THERE'S A COST REPORT THAT'S ALSO DUE TO THE STATE, AND WE WILL GET THAT FINISHED AS WELL.
SO THERE'S STILL SOME OTHER DOCUMENTS THAT NEED TO BE FINISHED, UM, IF THEY HAVEN'T ALREADY BEEN DONE, BUT ALL OF THOSE WILL BE DONE ON TIME AND SUBMITTED WHEN THEY NEED TO BE.
UM, LASTLY, THERE ARE SOME, UM, ITEMS WITHIN THE FINANCIAL STATEMENTS THEMSELVES THAT ARE ESTIMATES.
UM, AND WE DO RELY ON OTHERS ON THOSE ESTIMATES WHEN YOU'RE LOOKING AT LANDFILL COMPLETION AND PERCENT FULL AND THOSE TYPES OF THINGS.
ESTIMATING COST AND CLOSURE COSTS, WE RELY ON ENGINEERS AND OTHERS THAT HAVE THAT ABILITY TO DO THAT.
AND AS WELL AS WE RELY ON THE ACTUARIES TO DO THEIR REPORT FOR THE VRS PENSION AND
SO WE DO RELY ON OTHERS, UM, TO COME UP WITH SOME OF THE NUMBERS THAT
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ARE IN THIS REPORT.UM, WE DO ASSESS WHAT WE THINK IS, IS ACCURATE AND WHETHER WE THINK WE SHOULD BE RELYING ON THOSE WHO DO THAT WORK.
UM, BUT EITHER THE STATE HAS HIRED THOSE PEOPLE AND WE KNOW THAT THEY'VE DONE THEIR DUE DILIGENCE ON THEM.
UM, AND THERE AREN'T THAT MANY COMPANIES THAT ARE DOING THE LANDFILL TYPE WORK.
SO WE FEEL COMFORTABLE WITH THE OTHERS THAT YOU'RE USING TO HELP ESTIMATE THOSE NUMBERS.
UM, WITH THAT, I THINK THAT PRETTY MUCH COVERS WHAT I WANT TO GO OVER.
UM, SYNOPSIS IS IT WAS A CLEAN AUDIT AND, UH, WE WERE ABLE TO DO THINGS TIMELY AND, AND COMPLETE ON TIME.
AND WAS THAT YOUR SCOPE OF, UH, WHAT YOU THOUGHT WOULD BE? UH, YES, SIR.
UM, THE RESOURCES YOU HAD TO COMMIT TO IT? YES, SIR.
UM, WE DIDN'T HAVE TO MAKE ANY CHANGES OR ADJUSTMENTS TO OUR PLANNING.
AND THAT'S NOT ALWAYS A BAD THING.
IF YOU DO, SOMETIMES YOU JUST FIND THINGS THAT YOU DIDN'T REALIZE WERE HERE AND YOU GOTTA CHANGE THINGS UP.
UM, IT DOESN'T MEAN IT'S BAD, IT JUST MEANS IT'S DIFFERENT FROM WHAT YOU, WHAT WE WEREN'T EXPECTING.
BUT THIS YEAR WE DID NOT HAVE ANYTHING LIKE THAT.
DIDN'T HAVE TO ADJUST OUR PLANNING OR OUR PROCEDURES.
ANY QUESTIONS FROM ANYONE? I'D LIKE TO ADD ONE THING.
SINCE EVERYONE'S GOT A AUDIT REPORT IN FRONT OF THEM, IF YOU TURN TO PAGE 27, WHICH IS EXHIBIT FIVE, THAT WILL SHOW US HOW WE DID WITH OUR END OF YEAR FUND BALANCE.
AND WE TALK EVERY YEAR ABOUT OUR RESERVES AND HOW MUCH WE'RE PUTTING BACK INTO THE GENERAL FUND.
SO EXHIBIT FIVE, IF YOU LOOK, THERE'S FOUR COLUMNS THERE.
IF YOU JUST LOOK AT THE GENERAL FUND COLUMN, THE FIRST ONE YOU'LL SEE THAT WE RETURN JUST UNDER 1.2 MILLION INTO OUR FUND BALANCE.
SO THOSE ARE OUR RESERVES THAT WE USE TO FUND FUTURE CAPITAL PROJECTS.
THAT'S A NUMBER EVERYONE LIKES TO ZERO IN ON.
SO I FIGURED I'D POINT THAT OUT.
AND IF YOU WANT TO SEE HOW YOU GOT THERE COMPARED TO YOUR BUDGET, YOU CAN FLIP THE PAGE AND LOOK AT PAGE 29, AND THAT WILL SHOW YOU YOUR ORIGINAL BUDGET, FINAL BUDGET, AND THEN THOSE SAME ACTUAL AMOUNT.
WE WERE OVER SOME, WE WE'RE UNDER, SAME WITH EXPENDITURES FOR THE MAJORITY OF OUR EXPENDITURE CATEGORIES WE WERE UNDER.
SO THAT'S HOW WE GET TO THAT 1.2 MILLION INCREASE IN FUND BALANCE.
I'M TRYING TO FIND THAT ON PAGE 27, FIRST COLUMN.
UM, THIRD ROW FROM THE BOTTOM.
THAT'S THE INCREASE AND THAT'S THE INCREASE OR DECREASE TO ROUND IT OUT.
ANY OTHER QUESTIONS OR COMMENTS FOR ME? HAPPY TO ADDRESS THEM.
WHERE DO WE STAND IN OUR ENGAGEMENT WITH PB MAYORS? WE JUST RENEWED THE CONTRACT.
SO THIS WAS ONE YEAR, ONE OF FIVE WHERE COME.
SO I ASSUME WE'RE PLEASED WITH THEM.
VERY, THEY'RE PLEASED WITH US.
I, I JUST FEEL LIKE WE OUGHT TO TAKE THIS OPPORTUNITY TO COMMEND THE STAFF AND, UH, YOU, CARL, OF DOING A GOOD JOB.
I MEAN, OBVIOUSLY IT WAS A VERY POSITIVE REPORT AND INDICATION THAT YOU ALL WERE VERY COOPERATIVE AND PROFESSIONAL AND SO FORTH AND SO ON.
IF BARBARA WAS HERE FOR A LONG TIME, BUT THE TRANSITION HAS GONE WELL.
CONGRATULATIONS ON ANOTHER GOOD AUDIT TO ALL OF YOU ALL.
WHO INVOLVED
WE, WE, WE SHAKE THE TREE EVERYWHERE WE CAN.
I LOVE IT WHEN THERE ARE NO, SO WE USED TO CALL MANAGEMENT LETTER ITEMS TO REPORT, SO REALLY NEEDED ATTENTION TO MANAGEMENT, THE BOARD.
IT DIDN'T ALWAYS BE LIKE, IT WASN'T ALWAYS LIKE THAT.
IT'S, UH, THE ABSENCE OF THAT IS A VERY POSITIVE THING.
THANK YOU ALL FOR DOING A GOOD JOB, OFFICER.
IT FEELS GOOD TO BE DONE WITH IT AS WELL.
WE'LL SEND IT TO THE STATE AS REQUIRED AND OKAY.
DO THEY GIVE US ANY FEEDBACK OR NOT REALLY? I MEAN, THEY COULD, THEY COULD, IF WE HAD ISSUES, THEY WOULD GIVE US A PLAN AND STEPS THAT WE HAD TO TAKE.
BUT IF IT'S CLEAN, THERE'S NO REAL FEEDBACK.
IT'S US SUBMITTING INFORMATION TO THEM.
SO NOW, UH, APPROVAL OF THE MINUTES FROM THE AUGUST 6TH, UH, AUDIT AND FINANCE COMMITTEE WITH CLARIFICATION FOR THE GERMAN DATE, UH, OF TODAY.
A NOVEMBER DATE WAS MENTIONED, BUT IT NEEDED TO BE DECEMBER.
SO EVERYBODY HAD A CHANCE TO LOOK AT THE MINUTES.
ANY QUESTIONS? ANY CHANGES OR I MOVE.
DO WE APPROVE THE MINUTES FROM AUGUST 6TH, 2024?
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MEETING? SECOND.ANY FURTHER DISCUSSION ON THAT? ALL IN FAVOR SAY AYE.
A ANY OPPOSED THEN ARE APPROVED.
FINANCIAL MANAGEMENT FUND BALANCE POLICY REVISION.
MR. RODDY, AND I'LL PREFACE THIS WITH LAST DECEMBER, WE HAD UPDATED OUR FINANCIAL POLICIES AND ADDED A AVAILABLE FUND BALANCE, UM, NEW POLICY.
AND NOW THAT A YEAR HAS GONE BY AND WE'RE REALLY LOOKING AT WHERE WE FALL WITHIN THAT, WE'RE, OUR ORIGINAL SUGGESTION WAS TO ELIMINATE THE POLICY.
UM, AND AFTER TALKS WITH THE BOARD MEMBERS, IT WAS MORE OF THE IDEA TO DECREASE THE AMOUNT THAT THE POLICY MAKES US STAY WITHIN.
IT CAN BE OBVIOUSLY WHATEVER YOU GUYS DETERMINE AT THE MEETING, BUT, UM, KEVIN'S HERE TO HELP EXPLAIN WHY WE'RE SUGGESTING THAT.
SO AGAIN, WE WENT FROM THE ORIGINAL ELIMINATE POLICY BECAUSE WE WERE NOT ABLE TO MEET IT TO LOWERING IT TO 35%.
WE DISCUSSED AND
AND, UM, STAFF WENT THEN WITH LET'S SUGGEST 35% AS A, AS A SAFE NUMBER, AS AS A STRONG NUMBER.
BUT ONE THAT WE ALSO KNOW THAT WE CAN MEET, UM, IN OUR CURRENT ENVIRONMENT.
SO, UM, WITH REGARDS TO THAT, UM, THE POLICY WAS PUT IN PLACE WITH OFFSHORE CONSIDERATION AND REASONING BEHIND IT.
UH, I THINK MAINLY, AND GAVIN, YOU, I DON'T WANT YOU START ANY OF YOUR PRESENTATION OR DISCUSSION, BUT, UH, WITH STRONG INFLUENCE TOWARDS GETTING A GOOD RATING FOR US WITH THE BOND RATING AGENCIES AND, UM, I, I, I'M INCLINED, I JUST WANT TO, YOU KNOW, AFTER LOOKING AT IT, TALKING WITH SOME FOLKS TO, TO LEAVE IT AS IT IS, UH, SIMPLY BECAUSE WE, I WOULD LIKE TO SEE SOME MORE TIME SPENT OR HAVE SOME MORE TIME TO SPEND ON LEARNING HOW WE, IF WE SHOULD BE MEETING THAT GOAL.
WHAT DOES IT TAKE TO MEET THAT GOAL? AND IF NOT, THEN THE GOAL IS, IS WRONG, WRONG TO HAVE THAT GOAL.
BUT THE, THE BEGINNING OF IT, THE GENESIS OF THAT GOAL IS FOR PURPOSE.
AND SO, AND, AND I VIEW IT AS CONSERVATIVE, WHICH I, I'M FOR THAT BEING CONSERVATIVE, UH, WITH REGARDS TO OUR FINANCIAL STRENGTH AND STABILITY.
SO I GUESS I'M COMING DOWN THE SIDE.
I'D LIKE TO LEARN MORE ABOUT IT.
IT CAME ON A RELATIVELY SOON IN THE RECENT TWO BY TWO, RELATIVELY RECENT.
UH, AND JUST SOME VERBAL DISCUSSION ON IT, WHETHER A LOT OF IN DEPTH RESEARCH INTO IT OR, OR INFORMATION PRESENTED ALONG WITH IT.
AND THAT AND JUST THROW THAT OUT.
TO BEGIN WITH, JUST TO THROW A BUCKET RANGE INTO THERE.
AND, AND HOPEFULLY WE'VE GOT A PRESENTATION, UM, HERE THAT WILL GET US ALL LEVEL SET.
AND ALL WE WANT TO DO IS GIVE YOU THE INFORMATION.
'CAUSE I THINK ALL, YOU KNOW, I AGREE THE POLICY WAS PUT IN AT THE RIGHT POINT.
WE WANT TO, ONE OF THE THINGS DO IS, IS, YOU KNOW, SHOW YOU HOW THE RATING AGENCIES LOOK AT YOUR FUND BALANCE POLICY.
BUT ANOTHER IS SHOW YOU WHAT IT WOULD TAKE TO BECOME IN COMPLIANCE WITH THE POLICY THAT YOU JUST PUT IN, IN, IN TODAY'S DOLLARS.
SO SOME, SOME INFORMATION IN HERE.
UH, WE PULLED EXCERPTS OUT OF A PRESENTATION THAT WE GAVE VIC AND CARLA IN IN AUGUST THAT WAS OVER A HUNDRED PAGES.
SO WE WON'T MAKE YOU ENDURE THAT.
HERE'S, UH, ABOUT 10 PAGES FROM THAT PRESENTATION THAT SPECIFICALLY LOOKED AT NOT ONLY YOUR FUND BALANCE POLICY, BUT YOUR DEBT POLICIES AS WELL, WHICH WE KNOW IS ANOTHER TOPIC.
SO, UM, IF WE WANT TO WALK THROUGH THIS, YOU KNOW, FOR THE RECORD AND EVERYTHING, 'CAUSE IT'S BEEN RECORDED, I GUESS THE PUBLIC IS ABLE TO WATCH IT SOMEHOW, PROBABLY.
WOULD YOU TELL US YOUR NAME AND, AND YOUR COMPANY AND, AND, AND, AND A LITTLE BIT JUST SO WE KNOW WHO'S TALKING.
I'M A PARTNER WITH THE FIRM OF, UH, PFM FINANCIAL ADVISORS.
I'VE SERVED AT AS THE COUNTY'S FINANCIAL ADVISOR FOR I'D SAY OVER A DECADE, HELPING WITH THE VARIETY OF, UH, SO, YOU KNOW, DIFFERENT TOPICS, FINANCINGS, ESTABLISHING POLICIES.
SO THIS IS, UH, WHAT WE DO WITH LOCAL GOVERNMENTS IS JUST, YOU KNOW, ADVISE ON THESE MATTERS OR WHEN WE, UH, DID THE 2002 BOND OR 2022 BOND ISSUE, UH,
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WE ADVISE ON THAT AS WELL.SO IF, IF EVERYBODY COULD TURN TO PAGE TWO OF THE PRESENTATION THAT CARLA GAVE YOU, AGAIN, WE, WE'VE GOT THREE FUND BALANCE POLICIES, UH, AND THEN TWO DEBT POLICIES.
THE UNASSIGNED FUND BALANCE POLICY WITH THE TARGET OF 25% AND A MINIMUM, UH, TARGET OF 20%.
UH, WE'LL SHOW YOU WHAT YOUR PEERS HAVE AND WE'LL EXPLAIN THE RATIONALE ON WHAT OUR THOUGHTS ON THAT ARE.
UH, A RATE, UH, REVENUE STABILIZATION, UM, TARGET OF 3% OF YOUR, UM, GENERAL FUND BUDGET.
AND THEN THE POLICY MAINLY IN QUESTION IS THE ONE YOU JUST PUT IN AVAILABLE FUND BALANCE, WHICH IS, UH, DEFINED AS ASSIGNED FUND BALANCE, WHICH YOU JUST SAW FROM YOUR AUDIT AND UNASSIGNED FUND BALANCE.
SO THOSE, UH, TWO POLICIES, UH, BEING BETWEEN 55 AND 65% OF YOUR GENERAL FUND, UH, BUDGET.
SO IF YOU, IF YOU RAN A BUSINESS, YOU COULD EQUATE THIS TO KIND OF DAYS ON HAND, UH, THAT'D BE OVER SIX MONTHS OF CASH ON HAND.
YOU'VE GOT SIX MONTHS OF YOUR OPERATIONS SITTING THERE ON THE LOWER END UP TO ABOUT EIGHT MONTHS.
UM, SO THAT'S WHAT THIS, UH, POLICY DOES ON THE FUND BALANCE.
UH, THE TWO DEBT POLICIES ARE, ARE PRETTY TYPICAL FOR LOCAL GOVERNMENTS, AND WE'LL TALK ABOUT THAT MAINLY IN, IN THE SECOND PART OF THIS PRESENTATION.
BUT DEBT SERVICES, A PERCENT OF YOUR GENERAL FUND EXPENDITURES.
HOW MUCH OF ALL YOUR EXPENDITURES SHOULD, UH, GOING TO DEBT SERVICE, PAYING FOR PROJECTS, UH, EQUATE TO.
AND THEN THE, UH, ANOTHER POLICY IS YOUR TOTAL OUTSTANDING DEBT IS A PERCENT OF YOUR OVERALL THE COUNTY'S OVERALL ASSESSED VALUE.
AND SO THE QUESTION WE WERE ASKED, UH, THE SUMMER TO REALLY, UH, DIG IN AND EVALUATE FROM BOTH, YOU KNOW, FINANCIAL PRUDENCE AS WELL AS HOW THE RATING AGENCIES VIEW THAT IS, IS DO THESE POLICIES MAKE SENSE? LET'S GO BACK TO THE FUND BALANCE AGAIN.
JUST BRIEFLY, AND JUST FOR CLARIFICATION ON MY PART, UM, WE ARE NOT MEETING THAT AND HAVE NOT BEEN MEETING THOSE, THE POLICY.
WE ARE DEFINITELY BY FAR MEETING THE UNASSIGNED FUND BALANCE POLICY AND ALSO THE REVENUE STABILIZATION.
SO THE ONE THAT WE ARE CURRENTLY NOT MEETING IS THE AVAILABLE WITH THE TARGET BETWEEN 55 AND 65%, WHICH IS THE ONE WE JUST PUT IN PLACE A YEAR AGO.
ALL RIGHT? SO, I MEAN, I'M A FIRM BELIEVER OF, UH, NOT ESTABLISHING A GOAL THAT'S UNATTAINABLE BECAUSE THEN IT BECOMES MEANINGLESS.
PEOPLE GIVE UP AND SAY, YOU KNOW, I CAN'T DO IT.
YOU KNOW, IT'S LIKE TRYING TO RUN SUB FOUR MINUTE MILE.
I MEAN, IF YOU CAN'T DO IT, YOU CAN'T DO IT.
SO, YOU KNOW, BUT, UM, SO THAT'S INTERESTING TO REALLY DELVE FURTHER INTO, THAT'S, THAT'S ONE OF THE THINGS I'D LIKE TO GET A BETTER UNDERSTANDING OF IS TO, IF IT'S AN UNREASONABLE GOAL, FIRST OF ALL, HOW DID YOU GET THERE TO BEGIN WITH? IT WAS UNREASONABLE.
THEN WHAT IS MORE REASONABLE? AND IS THIS, UH, LEVEL PRESENTED TO US NOW? IS IT TOO LOW OR WHATEVER? HOW FAR WOULD IT EXCEED? SHOULD WE, SHOULD WE RIGHT STEP IT DOWN A LITTLE BIT AT A TIME TO SEE IF WE CAN MEET IT AND FIGURE OUT WHY WE CAN'T, YOU KNOW, JUST PUT SOME PRESSURE ON OURSELVES YEP.
IF, IF WE HAD ROOM FOR IMPROVEMENTS, WE, WE WOULD COMPLETELY AGREE.
AND THAT'S, AND THAT WAS KIND OF THE ORIGIN OF THE DIS THE DISCUSSION IS, UH, YOU KNOW, YOU'VE JUST GOT A GREAT AUDIT REPORT.
IF YOU HAVE A POLICY, YOU WANT TO EITHER BE MAKING PROGRESS TOWARD THAT POLICY AND BE COMMITTED TO THAT POLICY, OR IS THAT POLICY THE RIGHT LEVEL OR DO WE EVEN NEED THE POLICY? SO THOSE ARE KIND OF YOUR, YOUR THREE PARAMETERS THAT WE WILL EXPLORE A LITTLE BIT IN HERE.
UM, IN TERMS OF YOUR UNASSIGNED FUND BALANCE, UH, POLICY ON, ON SLIDE THREE, UH, YOU CAN SEE, YOU KNOW, THE RANGE THERE.
UM, WERE OVER THE 20 20%, UH, MINIMUM.
AND YOU'VE GOT A GOAL OF 25% UNTIL 23.
PART OF THIS IS, YOU KNOW, YOUR BUDGET'S BEEN GROWING SIGNIFICANTLY, SO YOU'VE GOT A LARGE AMOUNT OF MONEY AND JUST THE GROWTH OF YOUR BUDGET, IF YOU WANT TO MAINTAIN 25%, THAT'S GOTTA CONTINUE TO GROW.
SO IT ISN'T LIKE YOU'VE BEEN SPENDING YOUR UNASSIGNED, YOUR BUDGET HAS JUST BEEN GROWING, AND IE YOUR PERCENTAGE IS LESS.
UM, AND I'LL, LET'S TURN TO THE NEXT SLIDE AND I WILL EXPLAIN,
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GIVE YOU A RECOMMENDATION ON THIS ONE.BUT YOU'LL SEE HERE'S YOUR PEER GROUPS, UM, AGAIN, UH, MAINLY LOCALITIES AROUND YOU, BUT THESE ARE ALSO AAA, UH, RATED LOCALITIES.
UH, THE HIGHEST RATING YOU CAN BE.
SO YOUR PEER GROUP IS EXTREMELY ELITE.
AND SO WE LOOK AT THEM AND WE SAY, OKAY, YOU KNOW, CHESTERFIELD'S GOT A, UH, A POLICY OF 8%, UH, WITH A, A TARGET OF 10%.
HENRI'S GOT A POLICY OF 15%, OBVIOUSLY MUCH BIGGER, UH, LOCALITIES, UH, THAN THE COUNTY.
WERE UP THERE ON THE HIGHER END.
BUT WE WOULD ARGUE THAT WE NEED TO BE, UM, ALONG WITH THE CONSERVATIVE NATURE OF IT, WE'RE, WE'RE THE SMALLEST AA COUNTY IN THE UNITED STATES.
SO WE'RE HELD TO KIND OF A DIFFERENT STANDARD.
IF SOMETHING HAPPENS WITH ONE OF OUR MAJOR EMPLOYERS, IT'S, IT IMPACTS US A LOT DIFFERENTLY THAN IT WOULD IN RIKO COUNTY.
YOU KNOW, THEY WOULD NEED TO LOSE 30 EMPLOYERS, UH, TO THE EVERYONE THAT WE WOULD LOSE.
SO WE THINK IT IS VERY PRUDENT FOR US TO KEEP UNASSIGNED.
AN UNASSIGNED, UH, FUND BALANCE IS SOMETHING THAT YOU DON'T WANT TO SPEND.
IF YOU SPEND IT, YOU'VE GOTTA IMMEDIATELY REPLENISH IT.
UH, YOU CAN BE USING IT AS CASH FLOW THROUGHOUT THE YEAR, BUT AT THE END, UH, WHEN YOU DO YOUR AUDIT, YOU WANT, YOU NEED THAT NUMBER TO EXCEED 20%, UH, WITH THE TARGET OF 25%.
SO THAT'S WHAT KIND OF, YOU KNOW, THERE'S FOUR DIFFERENT CATEGORIES OF FUND BALANCE.
UNASSIGNED IS THE ONE YOU JUST REALLY DON'T TOUCH.
ALRIGHT, SO THOSE CATEGORIES, COMMITTED, ASSIGNED, UNASSIGNED, RESERVED, RESERVED.
THEY'RE FOUR, I THINK THERE'S FIVE COMMITTED.
THEY'RE RESTRICTED, RESTRICTED, RESTRICTED.
SO WHAT IS RESTRICTED? RESTRICTED ARE FUNDS THAT ARE REALLY NOT OUR MONEY, BUT WE HOLD.
SO WE HAVE KEEP IT AND THEY'VE GOT SPEND ON SOMETHING ELSE.
ALRIGHT? AND THEN COMMITTED WITH THE SUMMARY, ADDITIONAL CONTRACT ON, WE'RE GONNA HAVE TO PAY IT WHEN THE WORK IS DONE ON THE TOURS, TUITION, WHATEVER.
AND I DON'T KNOW IF YOU WANNA READ IT AT YOUR LEISURE, BUT ON PAGE 43 OF THE AUDIT REPORT, IT LISTS, IT'S KIND OF THE DEFINITION OF EVERY SINGLE ONE OF THESE TYPES OF BALANCES, RIGHT? NONS, SPENDABLE, RESTRICTED, COMMITTED, ASSIGNED, AND UNASSIGNED.
AND SO THEY, THERE'S A FIVE DIFFERENT CATEGORIES THERE, BUT UNASSIGNED IS THE ONE THAT IS KIND OF YOUR SAFETY, YOUR SAFETY NET.
YOU KNOW, ASSIGNED IS WE, WE'VE GOT SOME CAPITAL PROJECTS WE'RE GONNA SPEND THIS MONEY ON.
UM, OR WE, WE GOT THIS EARMARKED FOR SOMETHING OUT THERE.
SO SOME OF THE, YOU KNOW, AND THEN AS, AS VIC SAID, SOME OF THESE YOU JUST DON'T EVEN HAVE CONTROL OVER.
SO EVEN THOUGH YOU HAVE, YOU KNOW, A POLICY, YOU DON'T EVEN HAVE CONTROL OVER A COMPONENT OF IT.
SO WHEN WE GET INTO THE AVAILABLE, UH, FUND BALANCE, WE'RE TALKING, UH, UNASSIGNED AND ASSIGNED IS WHAT'S COMPRISING THAT, THAT THAT POLICY.
UM, SO THE, THE PEER ANALYSIS HERE OF YOUR PEERS, UM, OTHER FIVE, FIVE OF THE OTHER COUNTY'S PEERS HAVE A RE REVENUE STABILIZATION FUND.
I THINK IT'S, IT'S PRUDENT, IT'S 3% PERCENT FIVE NOW, RIGHT? YEAH.
IT'S, IT'S, IT'S WHEN THE BUDGET KIND OF GETS SHOCKED.
LIKE, YOU KNOW, COVID MADE EVERYBODY NERVOUS FROM A FINANCIAL PERSPECTIVE AND THE COUNTY'S FINANCES PERSPECTIVE, EVERYTHING TURNED OUT OKAY.
UH, BUT WHEN A RECESSION COMES AND IT SHOCKS THE COUNTY SYSTEM, YOU'RE EXPECTING X IN REVENUES AND IT DROPS.
THAT'S WHAT THE REP REVENUE STABILIZATION FUND IS.
SO YOU DON'T REALLY HAVE TO RUN TO YOUR UNASSIGNED.
YOU'VE GOT THIS LITTLE BUFFER ABOVE, UM, THE UNASSIGNED THAT YOU CAN USE, UH, WHEN YOU NEED IT.
AND SO SOME COUNTIES HAVE IT, UH, SOME COUNTIES DON'T.
I PERSONALLY THINK US HAVING THE 20 TO 25% UNASSIGNED IS A GOOD POLICY.
A LITTLE BIT OF BUFFER ABOVE THAT, AND THE 3%, UH, REVENUE STABILIZATION FUND.
SO, YOU KNOW, THAT'S GIVING YOU 23 TO 28%, YOU KNOW, OVER THREE MONTHS SITTING THERE IN THE BANK, UH, THAT WE CAN USE FOR THESE UNSEEN
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UNFORESEEN EMERGENCIES OR ECONOMIC SHOCKS.BUT IT ALSO NEEDS TO BE REPLENISHED.
YEAH, THERE'S RULES AND, AND LIKE, YOU KNOW, LIKE THE REVENUE STABILIZATION FUND, I HAVEN'T LOOKED AT THAT RECENTLY, BUT TYPICALLY THOSE ARE PUT IN, YOU'D HAVE TWO BUDGETS TO REPLENISH THAT, UH, YOU COULD USE, SOME PEOPLE RESTRICT, WE CAN USE HALF OF IT IN YEAR ONE AND THEN HALF OF IT IN YEAR TWO.
AND THEN WE NEED TO START, YOU KNOW, REPLENISHING IT BECAUSE THAT GIVES THE BOARD TIME TO MAKE, YOU KNOW, BUDGET DECISIONS.
IF YOU NEEDED TO CHANGE THE TAX RATE OR SOMETHING, YOU JUST DON'T WANT TO GET CAUGHT IN A YEAR BECAUSE YOU OBVIOUSLY CAN'T SAY, HEY, WE PASSED THIS TAX RATE AND NOW OOPS, THINGS ARE NOT GOING AS WELL, AND NOW WE NEED TO, TO DO IT.
UM, VERSUS, YOU KNOW, BUSINESSES HAVE MORE LEVERS, UH, THEY CAN PULL.
AND OURS IS OVER TWO YEARS, WE CAN'T SPEND IT ALL IN ONE YEAR.
IF THE FEDERAL GOVERNMENT HAS SOME POLICIES, PROBABLY HAVE THE POLICY, THEY DON'T STICK TO THEM.
NOW, I CAN'T SOLVE THOSE, I CAN'T SOLVE THOSE PROBLEMS.
BUT ON SLIDE SIX, SO WE GET INTO THIS AVAILABLE FUND BALANCE IN THE HISTORY OF THIS, UH, POLICY.
AND SO THIS SHOWS, UM, FROM 2014 TO 2023.
AND SO IN 23 WE'RE, YOU KNOW, A LITTLE OVER 51%.
AND SO WE PUT IN A POLICY SAYING 55 TO 65%, UM, YOU KNOW, OF THE, OF THE LAST SIX YEARS, WE HAVEN'T BEEN THIS, YOU KNOW, SEVEN YEARS, WE HAVEN'T BEEN UP TO THAT 55% LEVEL.
OKAY? SO AGAIN, LOVE MR. PETERSON, AND IF HE'S WATCHING, I HAVE NO PROBLEMS WITH THE, WITH THE THOUGHT OF THE POLICY IN PUTTING THE POLICY.
AND I THINK IT'S JUST A GOOD DISCUSSION TO HAVE LEVEL SET.
IS THIS THE RIGHT, YOU KNOW, LEVEL TO HAVE IN THERE? HOW MUCH MONEY, UH, DOES THIS EQUATE TO? SO WHEN YOU ADD THESE TWO UP, UH, AND, UM, YOU KNOW, WE'RE NOT, WE'RE NOT AT THE POLICY, HAVEN'T BEEN AT THE POLICY THE LAST COUPLE YEARS.
SO DO WE WANT TO MAKE A CONSCIOUS DECISION TO MOVE TOWARD GETTING IN COMPLIANCE WITH THE POLICY OR DO WE WANT TO ADJUST THE POLICY? UM, IN TERMS OF THE RATING AGENCIES, SINCE THAT WAS, YOU KNOW, PART OF THE REASON FOR THIS, WE, YOU KNOW, AND AGAIN, UH, THE OTHER 90 PAGES OF THIS PRESENTATION REALLY DUG INTO YOUR RATINGS.
FUND BALANCE IS A, IS A, YOU KNOW, SOME, UH, A BIG CONSIDERATION.
THE RATING AGENCIES, THERE'S A LOT OF OTHER VARIABLES THAT GO INTO YOUR, TO YOUR RATING, THE AMOUNT OF DEBT YOU GOT, YOUR OVERALL ECONOMY, YOUR WEALTH LEVELS, ALL THESE OTHER THINGS.
AND CERTAINLY BE GLAD TO COME BACK AT ANOTHER TIME AND TALK ABOUT THOSE.
BUT IN TERMS OF HOW THE RATING AGENCIES LOOK AT YOUR AVAILABLE FUND BALANCE AND WHAT THEY CALL IS THEIR MINIMUM LEVELS TO BE IN THE HIGHEST CATEGORIES, THE BOTTOM BEST POSSIBLE CATEGORY CUTOFF THERE, THEY REALLY RANGE.
UM, MOODY SAYS YOU NEED 35% S AND P SAYS 15%.
AND BELIEVE IT OR NOT, FITCH SAYS YOU ONLY NEED 7.5% LESS THAN ONE MONTH, UH, OF, OF CASH IN THE BANK TO BE AT THE HIGHEST LEVEL PRE FITCH RATING AS THEY JUDGE YOUR FUND BALANCE CATEGORIES.
UM, TO ME PERSONALLY, UH, THE FITCH IS WAY TOO LOW.
UH, MOODY'S, DEPENDING ON THE SIZE OF THE GOVERNMENT, UH, SOMEWHERE IN BETWEEN THEM AND S AND P, THEY ALSO LOOK AT OTHER THINGS LIKE MOODY'S, UH, LOOKS AT YOUR UTILITY FUND BALANCES.
SO THAT'S NOT PART OF OUR POLICY, UH, AVAILABLE, UH, ASSIGNED AND UNASSIGNED OR OUR TWO, UH, MOODY'S LOOKS AT OTHER DIFFERENT POTS OF MONEY THAT THE COUNTY COULD POSSIBLY GO TO IF THEY NEEDED TO, UH, FOR, FOR ECONOMIC HARD TIMES.
UM, AS YOU CAN SEE BY HOW THEY RATED YOUR CATEGORIES IN, IN 2000, UH, 23 WE'RE WELL ABOVE THOSE.
UM, SO WITH OR WITHOUT THE POLICY, WE'RE, WE'RE WELL ABOVE, UH, THESE, THESE LEVELS.
IF, IF WE WERE TO ADJUST THE POLICY AND BRING, UM, WOULD, WOULD MOVEMENT MORE TOWARDS THE TARGET BE SEEN AS A NEGATIVE? BECAUSE IT IS, EVEN THOUGH, YOU KNOW, IT'S STILL IN THE RIGHT RANGE, SO IT A NEW TARGET, IT'S STILL DOWNWARD.
UM, WOULD YOU KNOW WHAT I'M, YOU KNOW WHAT I'M SAYING? YEAH, I DO.
[00:30:01]
THEY SAY YEAH, YOU'RE STILL, OR WOULD WE JUST I THINK THE FACT THAT GIVE THEM A HEADS UP AND ADVANCE.YEAH, I THINK THE FACT, I THINK THE FACT THAT YOU'RE HAVING THESE DISCUSSIONS IS WHAT THEY WANT.
THAT, SO THEY WANT YOU TO MAKE PRUDENT DECISIONS WITH YOUR MONEY.
SO IF WE LOWER THE TARGET, IT DOESN'T MEAN YOU'RE RUNNING OFF AND SPENDING THE MONEY.
AND SO WHEN YOU MAKE THE DECISIONS ABOUT WHAT DO WE DO IF THE TARGET'S LOWER, YOU KNOW, PART OF THIS IS A SIGN THAT YOU'RE COMMITTING TOWARD NEXT YEAR'S CAPITAL PROJECTS, THOSE AREN'T GOING AWAY.
SO YOU STILL MAY KEEP THE MONEY AND STILL BE SPENDING THE MONEY ON THE SAME THINGS.
UH, IF YOU WERE SAYING, WE'RE GONNA GIVE, YOU KNOW, MASSIVE RAISES AND WE'RE GONNA USE ALL THAT MONEY FOR A ONE TIME EXPENSE, AND THEN NEXT YEAR, LIKE, OOPS, HOW DO WE BALANCE THE BUDGET? THAT'S A PROBLEM.
SO AS LONG AS IT'S, IT'S PRUDENT, WELL THOUGHT OUT, ADJUSTING THE POLICY, BEING THOUGHTFUL.
IF, IF AND WHEN YOU DECIDE TO SPEND THE MONEY WILL NOT BE AN ISSUE WITH THE RATING AGENCIES, IS IS IT POSSIBLE TO PUT IN, LET'S SAY WE MOVE LOWER THE TARGET, BUT THEN WE GET A LITTLE SPEND HAPPY.
CAN YOU PUT IN A TRIGGER LIKE AFTER SAY TWO OR THREE CONSECUTIVE YEARS OF MISSING THE POLICY, IT ACTIVATES THIS X WHATEVER THAT MECHANISM OF CORRECTION WOULD BE? NO, ULTIMATELY THE BOARD WOULD MAKE THE DECISIONS ITSELF.
YOU'RE SELF CONTROLLING IN THAT RESPECT.
SO STAFF OR, OR ADVISOR OR AUDITORS CAN'T PUT HANDCUFFS ON US THAT WOULD KEEP US FROM DOING THAT.
AND THAT WOULD JUST BE THROUGH THE BUDGET PROCESS.
WE WOULD NOTICE IT AT THE END OF THE AUDIT SEASON, WHICH GOES RIGHT INTO BUDGET AND WE FIX IT THEN.
WHICH IS KIND OF WHAT WE'RE DOING NOW, JUST LOOKING AT WHY WE DON'T MEET OUR POLICIES.
AND SO I THINK THE MONEY SLIDE IS REALLY SLIDE EIGHT HERE FOR YOU TO, TO LOOK AT THE DIFFERENT LEVELS.
AND AGAIN, WITH THE 55 AND 65% IS THE GOAL, IF WE SPLIT THAT AND SAID, HOW MUCH IS, HOW MUCH DOES IT COST US TO COME IN COMPLIANCE WITH 60% SPLITTING IT AGAIN, NOT, NOT AT THE HIGH, HIGH END OR LOW END OF THAT POLICY, IT'S ABOUT $12.7 MILLION TO COME IN COMPLIANT.
YOU'RE SHORT, YOU'RE SHORT RIGHT NOW TO GET IN COMPLIANCE WITH 60%.
UH, IF YOU WANTED TO GET TO 55%, YOU'RE IN BETWEEN THE MILLION SIX AND THE 12,000,007.
SO, YOU KNOW, UM, $7 MILLION TO GETTING COMPLIANCE WITH THIS.
AND I STRESS THIS IS GETTING A COMPLIANCE WITH A POLICY WE SET UP.
CORRECT? JUST, I DON'T WANT ANYBODY TO HEAR THAT AND SAY WE ARE OUT OF COMPLIANCE WITH ANYTHING.
AN ULTRA CONSERVATIVE POLICY THAT WE SET AN ULTRA CONSERVATIVE POLICY, WE SET UP JUST ONE THIS TABLE.
IT'S, IT CAN BE MISCONSTRUED VERY EASILY.
AND, AND ONE IMPORTANT THING HERE, WHILE WE'RE, UM, PUTTING THE DISCLAIMER, NO ONE ELSE IN THE, IN THE STATE OF VIRGINIA HAS SUCH A POLICY I PUT ON HERE, FALK YEAR IS THE ONLY ONE THAT WE KNOW, AND THEIR POLICY IS THAT THEY HAVE TWO MONTHS OF AVAILABLE CASH.
UM, SO AGAIN, WE SAW A BUNCH OF LOCALITIES, ALMOST ALL LOCALITIES WOULD HAVE THE UNASSIGNED, UH, AND MOST OF THOSE WERE 10 TO 12%, WERE 20 TO 25%.
UH, SO WE'RE ALREADY ABOVE THOSE.
UH, BUT NO ONE IN THE, IN THE COMMONWEALTH COULD WE FIND HAS THIS AVAILABLE, UH, CASH, UH, UH, FUND, FUND BALANCE POLICY.
UM, SO, UH, AND SO THIS GIVES YOU THE VARIOUS CATEGORIES.
SO IF YOU WENT TO SAY 40%, YOU'D BE $9.4 MILLION OVER IT.
AGAIN, NONE OF THIS SAYS YOU NEED TO SPEND IT, YOU NEED TO DO ANYTHING.
UH, IT IT THAT'S, THAT'S YOUR MONEY, THAT'S FUTURE DECISIONS.
UM, BUT YOU WOULD BE O YOU WOULD HAVE EXCESS MONEY OVER A IF YOU, IF YOU REDUCED IT, UH, TO 40%.
JUST, JUST THIS FUND BALANCE POLICY.
AND CARL, THIS POLICY DID NOT EXIST BEFORE A YEAR AGO, CORRECT? IS THAT CORRECT? UM, YOU KNOW, THERE'S SOMETHING TO BE SAID ABOUT HAVING EXCESS FUNDS SITTING AROUND NOT BEING UTILIZED.
IT'S A RESOURCE, YOU KNOW, I COULD SEE, BUT IT, WELL, BUT IT DOESN'T LOOK LIKE WE'VE BEEN, IT'S BEEN SITTING AROUND BECAUSE WE'VE BEEN EXCEEDING OR VIOLATING THE POLICY.
BUT, UM, A LOT OF THIS HAPPENED WHEN THIS POLICY WAS PUT IN PLACE.
IT WAS THE IDEA THAT WHEN GLAND RECEIVED THE AAA RATING, WE WERE MEETING THAT POLICY.
AND AT THE TIME OF THIS POLICY, ALL WE HAD TO LOOK AT WAS 22.
[00:35:01]
ONLY HAD THE 22 AUDIT TO LOOK AT.WE HADN'T EVEN RECEIVED THE FY 23 AUDIT FIGURES YET.
AND THEN IF YOU THINK BACK TO WHAT WE'VE DONE IN THE PAST YEAR, WE DID FRONT LOAD A LOT OF CAPITAL PROJECTS.
I THINK WE SPENT ABOUT $8 MILLION FROM OUR FUND BALANCE TO FUND.
UM, YOU KNOW, WE PUT MONEY TOWARDS A TANKER TRUCK AND FROM THE STOCK PROGRAM, THE STATION EIGHT, WHICH WERE NECESSARY THINGS, BUT IT DID SPEND DOWN OUR FUND BALANCE.
AND WE, WE HAD NO IDEA OF KNOWING THAT THAT WOULD HAPPEN WHEN WE PUT THIS POLICY IN LOOSE.
AND I WOULD ALSO, UM, AND AGAIN, THE CONCERN WAS THAT WE MAINTAINED A VERY STRONG POSITION FOR, FOR THE, UM, EXTERNAL AGENCIES THAT WOULD RATE US FOR OUR PUBLIC AS WELL AS TO, TO PROTECT US.
BUT WE JUST RECEIVED, AS YOU KNOW, RECENTLY OUR REAFFIRMATION OF AAA RATING FROM FITCHES.
SO, YOU KNOW, OBVIOUSLY THEY'RE, THEY'RE NOT AS FOCUSED ON THE 60%, UH, THRESHOLD 'CAUSE WE'RE REALLY NOT EVEN 50% WE'RE JUST BELOW THAT BY, BY A HAIR.
AND IT WAS A VERY STRONG RATING.
AND, AND I GUESS KEVIN, YOU CAN PROBABLY TALK ABOUT THAT.
AND SO LET'S NOT CONFUSE, SO THERE, THERE CATEGORY CUTOFF IS THE LOWEST OF THE THREE.
AND LET'S NOT CONFUSE THE DISCUSSION HERE.
I'M SAYING Y'ALL ARE DOING A LOT BRIGHT FINANCIALLY.
OH, CONTINUE DOING EVERYTHING YOU'RE DOING.
WE'RE TALKING SPECIFICALLY ABOUT DOES THIS POLICY MAKE SENSE IN THE CONTEXT OF HOW Y'ALL ARE RUNNING, UH, THE GOVERNMENT? BECAUSE I, I JUST DON'T THINK, YOU KNOW, E EVEN IF YOU ELIMINATED THIS POLICY, CONTINUE DOING WHAT YOU'RE DOING, IF Y'ALL THINK THE RIGHT NUMBER IS 48% OR 46% AND YOU GOT SOMETHING YOU WANT TO, YOU WANT TO MAKE A A $5 MILLION CASH CONTRIBUTION TO SOME PROJECT THAT YOU VIEW AS ESSENTIAL AND THAT WOULD PULL YOU BELOW THIS BECAUSE IT'S COMING OUT OF A SIGNED FUND.
BALANCE THAT PRUDENT DECISION.
THIS, THIS JUST WOULD, YOU KNOW, IF YOU GO TO THE EXTREME CASE HERE OF SIX 60%, YOU GOTTA COME UP WITH $12 MILLION, EITHER INCREASE REVENUES OR REDUCE SERVICE LEVELS AND SO TO COME IN EXPENDITURES, ARE WE TO COME INTO COMPLIANCE WITH A POLICY IT THAT WAY? UM, ARE WE GONNA GO TO MOODY'S AND S AND P TO GET RATINGS? IS THAT SOMETHING WE YES.
AND REALLY THEY COME TO US, DON'T THEY? YEAH.
WHEN, WHEN, WHEN IT'S TIME FOR YOUR NEXT BOND ISSUANCES, UH, WE WILL BE TALKING TO YES, FISH DID IT JUST BECAUSE THEY WANTED TO.
THEY, WELL SEE PART OF THEIR JOB IS, SO YOU, WHEN YOU SELL THE BONDS, THE BONDS ARE OUT THERE.
OWNERS OF THE BONDS WANT TO MAKE SURE THAT IT'S JUST, THEY MADE THEIR INITIAL PURCHASING DECISIONS, BUT THEY MAY BE SELLING THE BONDS OR TRADING IN THE SECONDARY MARKET.
SO THE RATING AGENCIES HAVE TO CONTINUALLY DO SURVEILLANCE AND KEEP YOUR RATING UP TO DATE.
AND THEY, ANNUALLY, MOODY'S S AND P AND FICH ALL LOOK AT YOUR CREDIT ON AN ANNUAL BASIS, WHETHER THEY CALL US OR WHETHER THEY LOOK AT YOUR, UH, FINANCIAL REPORT.
DO WE EVER SEE A NEED TO GO TO THEM AND SAY, YOU KNOW, DO YOU SEE ANYTHING THAT WOULD CHANGE YOUR OPINION? THAT'S REALLY OUR ROLE.
I MEAN, I'M, I TALK TO 'EM ON A WEEKLY BASIS.
AND SO THAT'S SORT OF WHAT YOU'RE PAYING US TO GIVE YOU GUIDANCE.
LIKE IF, IF I WAS SITTING HERE SAYING, YOU KNOW, AND I'LL HAVE, I'LL HAVE CLIENTS COME TO ME AND SAY, I WANT TO TAKE MY FUND BALANCE FROM 10% TO 5% AND I WANNA SPEND IT ON THIS.
AND WE'LL BE LIKE, NO, NO TIME OUT.
YOU KNOW, THAT'S GONNA STRESS YOUR RATING.
UH, AND SO WE DO HAVE THOSE CONVERSATIONS WITH BOARDS AND COUNCILS, YOU KNOW, THROUGHOUT THE US AND JUST TRY TO GIVE YOU WARNING SIGNALS WHERE THAT, THAT'S NOT IN YOUR BEST INTEREST.
NOW YOU CAN ULTIMATELY, THE BOARD CAN MAKE THE DECISION TO DO WHAT THEY WANT, BUT THAT WILL PUT STRESS ON YOUR RATING.
UM, THE FACT THAT NO ONE ELSE HAS THIS POLICY AND WE'RE NOT IN COMPLIANCE WITH THIS POLICY AND THEY DIDN'T EVEN ASK US ABOUT THIS POLICY LEADS US TO BELIEVE I SEE WHEREVER YOU HAVE SOME DISCOMFORT, YOU KNOW, NOT BEING THE POLICY, RIGHT.
IF IT'S AN ARBITRARY POLICY IN YOUR MIND, BUT I, I KEEP GOING BACK SOME THOUGHT WENT INTO IT TO BEGIN WITH AND I DON'T WANT TO VIOLATE THAT OR, OR UH, YOU KNOW RIGHT.
I, I NEED TO HAVE A LITTLE BIT BETTER UNDERSTANDING, SO, OKAY.
NO, THAT'S, THAT, THAT WAS THE POINT OF IT.
JUST THE INITIAL OBSERVATIONS WHICH I GAVE ALONG THE WAY, I THINK, YOU KNOW, IT IT, YOU KNOW, IF YOU'RE GONNA FOCUS ON A POLICY, GET UP TO THE TARGET LEVEL ON YOUR UNASSIGNED, THE 25% THAT YOU'RE NOT TOUCHING, YOU'RE CURRENTLY AT 22%.
NOT BAD, YOU'RE IN THAT 20 TO 25%, BUT THAT'S BEING AT THE UPPER END OF THAT POLICY.
MAINTAIN YOUR REVENUE STABILIZATION
[00:40:01]
RESERVE THAT GIVE YOU 28% AND THEN CONTINUE CASH FUNDING YOUR PROJECTS THROUGH YOUR, YOUR ASSIGNED FOR FUTURE YEARS.THAT'S SAVING YOU A TON OF MONEY.
UH, YOUR, UH, PRACTICE OF REALLY SETTING ASIDE MONEY FOR ASSIGNED PROJECTS COMING UP THAT'S SAVING YOU FROM HAVING TO BORROW, HAVING TO PAY INTEREST ON THAT BORROWING.
UH, SO THE, THE CASH CAPITAL THAT Y'ALL DO ON AN ANNUAL BASIS IS, IS REALLY PUTTING YOU IN THIS STRONG POSITION.
NOW WE'RE GONNA HAVE SOME FUTURE CAPITAL NEEDS.
YOU'VE GOT A LONG, LONG-TERM CIP, EVERYBODY DOES, BUT Y'ALL'S PRACTICE OF REALLY COMMITTING MONEY ON AN ANNUAL BASIS TO THIS IS REALLY PUT YOU IN A STRONG POSITION.
WELL WE HAVE BEEN FORTUNATE WE COULDN'T FORESEEN THIS.
WE HAVE BEEN INCREDIBLY FORTUNATE OVER THE LAST THREE YEARS WITH WHERE RATES HAVE BEEN.
BECAUSE I MEAN THAT'S WHAT WAS IT EVERY YEAR? 5 MILLION? WELL, I MEAN YEAH, 5 MILLION PLUS OF FOUND MONEY.
I MEAN INFLATION DIDN'T HELP, BUT NONETHELESS, RIGHT.
THAT WAS A VERY, IF IF IT WOULD BE THAT MUCH MORE OF AN ISSUE THOUGH, IF WE WERE AT, WE WERE EARNING NOTHING ON THAT MONEY.
UM, FOR CLARIFICATION, BUT, WELL, I WOULD'VE BEEN, I WOULD IT BE HELPFUL BECAUSE WE HAVE ON CONSENT AGENDA FOR 35% POLICY.
IF IT IS THE DESIRE OF THIS COMMITTEE THAT WE PULL IT OFF, THEN WE JUST GO AHEAD AND AMEND THE AGENDA WHEN WE OPEN IT.
WE REMOVE THAT FROM DISCUSSION FOR, SO THERE'S MORE TIME FOR FUTURE CONSIDERATION.
I WOULD FEEL, I GUESS, YOU KNOW, I SHOULD BE MORE UP TODAY ON THIS THAN I AM AND I APOLOGIZE FOR NOT BEING, BUT I'D LIKE TO FEEL MORE INFORMED.
I MEAN, DI DIGEST THE INFORMATION AGAIN, YOU CAN LEAVE IT, YOU CAN REDUCE IT, YOU CAN ELIMINATE IT.
WELL, THE OTHER, BE HONEST WITH YOU, THE OTHER THING, IT SEEMS LIKE A HUGE DROP, WHICH WE'RE RECOMMENDING FROM 60% DOWN 30 OR 35 35.
AND WE WOULD BE IN COMPLIANCE, WE ACTUALLY WOULD BE IN A PLUS OF 40%, SOMEWHERE BETWEEN 40 AND 50.
WE WOULD BE IN COMPLIANCE NOW.
AND YOU KNOW, I GUESS THE QUESTION IN MY MIND IS DO WE NEED TO REALLY PAY ATTENTION TO TIGHTENING OUR BELT, COST OF SERVING, CUTTING, WHATEVER FROM OUR EXPENSES, RIGHT? BECAUSE IF WE ARE GONNA KEEP A POLICY LIKE THIS, THIS NUMBER RIGHT HERE, THE $12.7 MILLION THAT WE'RE OFF BY, THAT'S JUST BASED ON OUR MOST RECENT FIGURES.
THIS POLICY REQUIRES US TO KEEP A PER CERTAIN PERCENTAGE OF THE SUBSEQUENT YEAR'S BUDGET.
SO EACH YEAR AS OUR BUDGET GETS BIGGER, LIKE WE'RE ABOUT TO START TALKING ABOUT THE FY 26 BUDGET, IT'LL BE A BIGGER'S GONNA BE BIGGER.
SO OUR, THE DOLLAR AMOUNT OF OUR FUND BALANCE, WE'LL NEED TO INCREASE BY THAT MUCH MORE.
SO WHILE WE'RE PLANNING ON FY 26, THIS, IN OUR MINDS, THIS NUMBER NEEDS TO BE MORE LIKE 14 MILLION PROBABLY.
SO WE NEED TO EITHER CUT EXPENSES AND OR RAISE REVENUE AND THAT WOULD BE 14 MILLION.
THAT'S PART OF THE BUDGET TO BE PRESENTED TO THE BOARD WOULD START REFLECTING THAT DESIRE.
SO, BUT IF YOU WOULD LIKE TO PULL IT OFF AS A RECOMMENDATION FROM THE COMMITTEE, DO WE NEED TO MAKE A MOTION ON THAT? YES.
WELL I'LL MAKE A MOTION AND WE, I JUST WANT CLARIFICATION.
SO THE 35, IS THAT THE TARGET OR IS THAT THE FLOOR? THAT WOULD BE THE TARGET.
WHAT WOULD BE THE 4 20 20, THE WAY IT'S WRITTEN IN THE AMENDED POLICY, 20 TO 30 AND 35 PER PERMIT.
ONE THREES CONCERNS, I WAS THINKING A STEP DOWN APPROACH WOULD BE, UH, PRUDENT, BUT TO A 40, A 55, 65 CURRENT TO A 40 TO 50%.
UH, AND THEN WITH THE THOUGHT WHEN WE'RE NOT COMMITTING IT TODAY, BUT WITH A VERBALIZED THOUGHT OF 30 TO 40% IN THE FUTURE.
SO I MEAN WE'RE, WE'RE CLEARLY SHOWING THAT 55 TO 65% BASED ON COMPS, BASED ON LOGIC, BASED ON ALL THOSE THINGS IS TOO HIGH.
BUT 40 TO 50 IS CERTAINLY KEEPING US ABOVE ALL THE OTHERS, NOT DOING ANYTHING THAT'S TOO BIG A SWING.
BUT IF WE VERBALIZE THAT, WE COULD ENVISION A FURTHER, UH, BUMP DOWN, THEN WE, WE GET 40 TO 50% A LITTLE TIME TO FIGURE THAT OUT.
BUT I THINK THEY NEED THE POLICY.
SO TAKE IT DOWN AN INTERIM TO THAT LEVEL TODAY.
WELL, I, I STILL WOULD LIKE TO SEE, GET A LITTLE MORE RESEARCH INTO THE THOUGHT PROCESS THAT WENT INTO ESTABLISHING AT THE LEVEL IT IS NOW.
I'D JUST LIKE TO HAVE SOME TIME TO
[00:45:03]
LOOK AT THAT JUSTIFICATION OF THE REASONING BEHIND THAT.AND IF IT'S SIMPLY TO GET FITCH RATINGS OR WHATEVER, YOU KNOW, NOT FIT, BUT STANDARD POOLS OR MOODY'S, WHATEVER, UM, THEN THAT'S ONE THING.
IF IT'S OTHER THINGS GOING INTO THAT, UM, I MEAN I DON'T FEEL LIKE WE ARE SPENDING MONEY, UH, NO, WE'RE STILL IN GREAT SHAPE FOR OUR FUND BALANCE.
YEAH, I MEAN I THINK WE ARE RUNNING A TIGHT SHOP.
I MEAN I'VE, SINCE THAT FELT THAT SINCE I'M BEING A MEMBER OF THE BOARD OF SUPERVISORS, SO I'M NOT CONCERNED THERE, YOU KNOW, WE LOOK AT THE BUDGET THAT, YOU KNOW, IT'S A, IT'S A VERY IN DEPTH TYPE PROCESS.
SO, BUT YEAH, I, I'LL I'LL SAY ONE MORE THING.
AND I WAS PART OF THE THREE RATING TRIPS TO GET ALL THE, THE FIRST TIME AAS YOU, YOUR BAR WAS HIGHER GIVEN THE SIZE OF THE COUNTY.
AND SO WE DID HAVE HIGHER NUMBERS THEN WE HAVE FINANCIALLY PERFORMED AND EARNED OUR STRIPES.
AND SO IT WAS A HIGH BAR TO CROSS.
I'M NOT SAYING IT'S ANY LOWER NOW, BUT YOUR FINANCIAL PERFORMANCE STANDS FOR ITSELF AND THE RATING AGENCIES WILL HAVE, YOU KNOW, NO CONCERNS OF BRINGING THAT, THAT NUMBER THAT WAS REQUIRED, UM, OR PEOPLE FELT WERE REQUIRED TO GET THERE OR WAS IN PLACE WHEN WE GOT THERE.
UM, AND SO BASED ON ALL THE OTHER STRENGTH, THE GROWTH, EVERYTHING ELSE ABOUT THE COUNTY.
SO IT'S BEEN, IT'S BEEN FLUID OVER THE YEARS SINCE WE'VE, WE'VE GOT, SINCE WE INITIAL GOT THAT THAT RATING AND THIS RECOMMENDATION COMES OUT OF THE WORK YOU ALL HAVE DONE WITH US.
YES, EV BEFORE THE BOND ISSUANCE.
DURING THE BOND ISSUANCE SINCE THE BOND ISSUANCE.
SO I MEAN THIS, WE'RE GETTING ADVICE FROM THE SOURCE THAT WE SHOULD BE GETTING ADVICE ON THIS BASED ON OUR WORK WITH YOU AND THE, THE DAY ALMOST WEEKLY CONTACT WITH THE RATING AGENCIES AND EVERY OTHER, UH, YOU KNOW, MOST, A LOT OF OTHER GOVERNMENTS IN VIRGINIA.
A COUPLE THINGS I TAKE IT THAT YOU PROBABLY, WELL YOU MAY HAVE BEEN AN OPPOSITION OF ESTABLISHING AT THAT LEVEL TO BEGIN WITH WHEN IT WAS ESTABLISHED, YOU KNEW ABOUT IT.
SO YOU WOULD HAVE A PIN ON A TIME THAT, HEY GUYS, BASED ON ALL THIS STUFF, IT LOOKS LIKE IT'S ESTABLISHING IT A LITTLE TOO HIGH.
I ALSO FEEL LIKE IS THERE'S NO URGENT SENSE OF URGENCY IN GETTING THIS DONE TODAY.
IF WE TAKE SOME TIME AND LOOK AT IT AND, AND ON PURPOSE, PAY ATTENTION TO THIS ONE LITTLE AREA WHICH I'M NOT FOCUSED ON AND SAY SET A TARGET BY THE END OF THE FIRST QUARTER OF NEXT YEAR, WE'LL COME FORTH WITH RECOMMENDED POLICY AT THAT POINT.
IS WOULD THAT BE ACCEPTABLE? I WOULD, I WOULD SAY THERE'S NO, THERE'S NO URGENCY.
OUR, OUR CONCERN WITH THE POLICY WOULD BE OF PUTTING IN A POLICY THAT WE'RE NOT MEETING, THAT YOU'RE NOT MEETING AND WITHOUT THE DISCUSSION OF IS THE, WHAT IS OUR GOAL TO ACHIEVE THIS POLICY BECAUSE YOU WEREN'T MEETING IT WHEN YOU PUT IT IN AND APPARENTLY THERE'S NOT KNOWLEDGE OF HOW YOU WERE GONNA GET THERE FOR, FOR PURPOSES OF THE 20 25, 20 26 BUDGET.
I RECOMMEND THAT WE GET THIS POLICY DECIDED UPON IN OUR NEXT FINANCE COMMITTEE MEETING BEFORE ANY BUDGET FOR THE UPCOMING YEAR IS ENACTED.
SO THAT WE HAVE THAT SO THAT PEOPLE ARE BUDGETING TO A SOUND POLICY VERSUS SOMETHING THAT WE'RE SHOWING BY ALL METRICS IS NOT, UH, WHERE IT SHOULD BE.
AND, UM, WE JUST SET THAT UPON OURS.
WE PUT THAT UPON OURSELVES SO WE HAVE A PLAN TO GET THIS POLICY TAKEN CARE OF AT MOST ONE MEETING FROM NOW.
IF WE THINK WE'D DO THAT, THAT THE ONE THING WOULD BE HELPFUL TO ME IS TO SEE THAT BUDGET, UM, BEFORE WE MAKE THAT DETERMINATION BECAUSE THAT, THAT'LL TELL US A LOT AS FAR AS WHAT WE'RE CAPABLE OF DOING.
AND YOU WOULD SEE THAT IN FEBRUARY BUDGET PRESENTED TO YOU, WHICH WOULD BE BEFORE THE NEXT AUDIT AND FINANCE COMMITTEE.
ALRIGHT, LET'S, SO THE INITIAL BUDGET DRAFT WOULD BE ABLE TO REPRESENT A VARIETY OF, OF OPTIONS, YOU KNOW, 60%.
SO IF WE CHANGED MY MOTION TO TARGET BY THE END OF FEBRUARY, WHICH WOULD BE BY THE MARCH 1ST MEETING, THE FIRST PART OF MARCH MEETING, RIGHT? YES SIR.
NOT THE END OF MARCH, BUT THE, BY THE END OF FEBRUARY.
[00:50:01]
END OF FEBRUARY, YES SIR.WILLING TO SECOND NOW? YEAH, I'LL SECOND THAT.
DOES THAT NEED TO BE A MOTION? I THINK HE MADE MOTION.
WELL, WELL HE MADE IT MOTION, BUT IT WAS NEVER SECONDED.
WELL, I MEAN, JUST ON THE PARTICULARS, I MEAN WE'RE GOING TO REVISIT IT, BUT I'D JUST LIKE TO POINT OUT THAT THE GAP BETWEEN THE TARGET AND THE FLOOR EXPANDS AND I JUST, I'M NOT COMFORTABLE WITH THAT 20% FLOOR.
I THINK THAT NEEDS, I'D BE COMFORTABLE WITH 30 EXCEPT MAYBE 25%.
I THINK THAT WE SHOULD KEEP IT A LITTLE TIGHT.
PROBABLY GONNA NEED YOUR HELP IN FLESHING THIS OUT TOO.
YEAH, I I WOULD COMPLETELY AGREE WITH THAT COMMENT THAT THE FLOOR SHOULD NOT GO BELOW YOUR TARGETED ON UNASSIGNED.
UM, THAT, BECAUSE IF YOU, IF YOU JUST GO UP TO YOUR TARGET UNASSIGNED, YOU, YOU'RE STARTING WITH 25% AND IF YOU HAVE ANY ASSIGNED ON TOP OF THAT, NO WIGGLE ROOM, YOU'RE GONNA BE 30, 35% WITHOUT, WITH JUST NORMAL COURSE OF ACTION.
I MEAN, TO ME YOU'RE GONNA BE IN THE 40% ANYWAY BECAUSE THAT'S HOW MUCH YOU'RE SPENDING ON FUTURE YEAR CIPS.
WELL THAT'S A GOOD POINT IS, YOU KNOW, SET THESE THING, CAN WE MAINTAIN IT? I MEAN, YOU KNOW, WE DON'T WANNA REVISIT THIS YEAR FROM NOW SAYING, WELL THIS IS GROWN MUSHROOM DOS AND WE CAN'T MEET IT.
SO WE WE NEED TO GET A COMPLETE UNDERSTANDING.
YEAH, WE, WE CAN GLAD TO WORK WITH OKAY.
CAR AND VIC ON, UH, GETTING, GETTING THE LANGUAGE FOR Y'ALL'S CONSIDERATION.
ANY FURTHER DISCUSSION? ALL THEY WILL SAY, AYE.
A OPPOSED, OKAY, THANK YOU SIR.
UH, AND THEN I GET THE NEXT TOPIC TOO.
THE, JUST THIS ONE'S A LOT SHOULD BE A LOT MORE STRAIGHTFORWARD, BUT I KNOW THERE'S BEEN DISCUSSION ON THE, THE, UM, THE BONDS WITH THE REMAINDER OF THE REFERENDUM FOR THE COURTHOUSE WHENEVER, UH, YOU GET BACK THE DESIGN AND BIDS AND ALL THAT.
AND SO SLIDES 10, 11 AND 12, LOOK AT YOUR DEBT POLICY AND AGAIN, THAT THIS WOULD BE DEBT SERVICE IS A PERCENT OF GENERAL FUND EXPENDITURES, UM, YOU KNOW, WITH UH, UH, NOT TO EXCEED 12 AND A TARGET OF 10%.
SLIDE 10 SHOWS YOU WHERE YOU'VE BEEN, UH, YOU KNOW, DOWN THERE IN THE FOUR TO 6% RANGE, EVEN LOWER.
AND THEN WE ISSUED THE $50 MILLION IN, IN 22 AND THE DEBT SERVICE UH, POPPED IN THERE IN 23.
UH, AND THEN ON SLIDE 11 SHOWS US PAYING OFF, UH, DEBT SERVICE AS WELL AS OUR GENERAL FUND, UH, EXPENDITURES GROWING.
AND THEN THIS LAYERS IN, UH, THE REMAINDER OF THE REFERENDUM, BE IT 46 MILLION.
YOU KNOW, YOU GUYS CAN DECIDE HOW MUCH OF THAT YOU KNOW YOU'RE GONNA, YOU'RE GONNA SPEND.
BUT THE GREEN BARS THERE SHOW THAT YOU BASICALLY, WHEN THAT DEBT COMES ON, YOU'RE, YOU KNOW, BELOW 8%.
SO THE, THE TAKEAWAY FROM THIS IS 10%, YOU'VE GOT THE DEBT, 10% SAYS A TARGET 12% IS MAXIMUM.
AND TWO AND A HALF PERCENT OF ASSESSED VALUE.
WHICH YOU'RE LIKE A HALF PERCENT WITHIN THOSE YOU'RE, YEAH, MUCH THAT ONE'S NOT EVEN A, A FACTOR FOR YOU GUYS WITH, WITH THE COUNTY'S ASSESSED VALUE, BUT, SO THIS SHOWS YOU GOT DEBT CAPACITY FOR THE 46 MILLION AND THEN, AND THEN SOME.
SO WE JUST WANT TO MAKE SURE THAT, UH, YOU KNOW, THAT Y'ALL WERE AWARE OF THIS AS YOU PLAN FOR THE FUTURE, YOU KNOW, USE OF THAT, OF THAT REFERENDUM DOLLARS.
I'M NOT GONNA TIE YOU TO TO THIS, BUT WHERE AT THIS CURRENT.
SO, SO I MEAN WE COULD PROJECT FORWARD AND SAY WE'RE GONNA GET FURTHER RATE CUTS, BUT RIGHT NOW, WHERE DO YOU THINK WE WOULD BE ISSUING AN A BOND RATING? YOU, YOU WOULD BE LIKE 3.4 IS, IS STAFFORD COUNTY RECENTLY SOLD, WHICH IS TRIPLE, TRIPLE LIKE YOU GUYS A COUPLE WEEKS AGO.
SO JUST THE, YOU KNOW, IN THE, IN LESS THAN THREE POINT A HALF PERCENT.
WHAT WOULD WE EXPECT? WE WOULD IT, HOW CLOSE WOULD IT GO WITH FED CUTS? SO IF WE HAD 50 BASIS POINTS IN FED CUTS, WOULD WE EXPECT 47, 40 8% AND PROBABLY 47, 48 BIPS AND WHAT WE COULD EXPECT OUR PRICING TO BE.
ARE THEY FAIRLY CORRELATED? SOMEWHAT, BUT YES AND NO BECAUSE I MEAN YOU'RE ISSUING 20 YEAR BONDS AND THE FED CUTS ARE AFFECTING THE FIRST COUPLE YEARS.
[00:55:01]
DROP SIGNIFICANTLY.AS YOU KNOW, THE YIELD CURVE'S KIND OF WEIRD WHERE YOU CAN BORROW ONE YEAR YOU, YOU CAN GO, YOU KNOW, GIVE ONE YEAR INVESTMENT RETURNS GREATER THAN 10 YEAR INVESTMENT RETURNS.
SO YOUR SHORT END OF THE CURVE WILL DROP YOUR LONG END.
THAT WILL BE, YOU KNOW, DEPEND ON, YOU KNOW, HOW THE ECONOMY'S DOING AND EVERY, EVERYTHING ELSE IS DOING.
THE, THE LONG END IS MORE REFLECTIVE OF LIKE MORTGAGE RATES AND STUFF.
SO IF YOU SAW MORTGAGE RATES COME DOWN A PERCENT OR TWO, THEN YOU'D EXPECT YOUR LONG BOND RATES TO GO DOWN.
SO CONSERVATIVE BUDGET ESTIMATING 3.5% WOULD BE OF GOOD.
HOPE TO BE MORE IN THE 3% RANGE.
PROBABLY NOT GONNA BE BACK TO THE ONE 7% THAT WE DID IN 22, BUT, UH, BUT THREE, FIVE IS A GOOD MODELING NUMBER.
3, 3, 5 IS A GOOD MODELING AND I'M SURE, I'M SURE WE RAN THIS, BUT IT DOESN'T SAY IT BUT WE WERE, I'M SURE WE WERE AT FOUR AND A HALF OR 5% ON THIS.
SO, BUT YES, THREE, THREE AND A HALF WOULD BE A GOOD GUESSTIMATE.
OKAY, ANY OTHER QUESTIONS FOR KEVIN? GOOD JOB, PAM.
ALRIGHT, I APPRECIATE YOU FEELING MY QUESTIONS.
AND I GOT 90 MORE PAGES HERE IF YOU'D WANT SEE
AND ALL THAT WE HAVE LEFT IS, IS IT QUARTER PROJECTIONS? THE PROJECTIONS, WHICH AS YOU KNOW, FIRST QUARTER IS ONLY THREE MONTHS OF THE YEAR AND UM, LOOKING AT WHERE WE WERE THEN, I DIDN'T HAVE MUCH DATA TO GO ON BECAUSE REAL ESTATE TAXES ARE DUE DECEMBER 5TH ANY DAY NOW.
UM, SO MY BEST PROJECTION, IT'S ALWAYS PRETTY CONSERVATIVE BEGINNING OF THE YEAR.
SO I'M PROJECTING THAT WE COME IN AROUND EXACTLY WHAT WE BUDGETED MAYBE A HUNDRED THOUSAND DOLLARS HIGHER, UM, IN REVENUES.
AND BY LOOKING AT WHAT DEPARTMENTS TEND TO TURN BACK IN AT THE END OF THE YEAR THROUGH UNUSED, YOU KNOW, THROUGH VACANCIES, JUST UNUSED PIECES OF THEIR BUDGET.
I'M LOOKING AT A RETURN FROM DEPARTMENTS OF $1.1 MILLION IN EXPENSES, WHICH WOULD GIVE US AN OPERATING SURPLUS OF A LITTLE OVER $7 MILLION.
AND THEN ONCE WE TRANSFER WHAT WE BUDGETED FOR OUR CAPITAL PROJECTS, SCHOOLS AND GENERAL FUND AND THEN OUR CSA FUNDS, I'M THINKING WE MAY OR MAY NOT.
I MEAN IT'S BASICALLY, I'M LOOKING AT A LEVEL BUDGET, LET NO RETURN TO SURPLUS.
I'M SHOWING HERE $241,000 USE OF SURPLUS.
BUT AGAIN, THIS IS VERY CONSERVATIVE.
UM, WE'LL KNOW A LOT CLOSER WITH THE SECOND YEAR, THE SECOND QUARTER PROJECTION BECAUSE WE'LL HAVE SOME REAL ESTATE FIGURES TO LOOK AT.
JUST SO FOR THE GENERAL PUBLIC, I WOULD SAY WHERE WE WANT TO BE IS MAKING THE ADJUSTMENTS TO THE CAPITAL YES SECTION MM-HMM
SO THAT I, I JUST WANNA PUT IT IN THE CONTEXT FOR ANYBODY IN THE GENERAL PUBLIC, THIS IS WHERE WE IDEALLY WANT TO BE, IS MAKING LONG-TERM INVESTMENT DECISIONS, NOT HAVING TO BE ON THE UPPER END OF THESE BUDGET PROJECTIONS WHERE WE'RE AFFECTING DAY-TO-DAY STUFF.
AND THIS IS A NICE PLACE FOR US TO BE AS A COUNTY BECAUSE THAT'S WHERE WE'RE MAKING OUR DECISIONS VERSUS HAVING TO GO AND SAY, WHAT DO WE HAVE TO CUT FROM TOMORROW OR NEXT MONTH OR THE NEXT TWO QUARTERS OPERAT FUNDS.
AND SO, UM, AND OUR FIRST, I DON'T WANT PEOPLE TO THINK WHEN WE'RE HAVING THESE CUTS DON'T CUT DECISIONS THAT IT'S ANY NEGATIVE.
THIS IS, THIS IS A GOOD SPACE.
WE ARE IN A GREAT SPACE TO BE.
OUR FIRST QUARTER PROJECTIONS ARE ALWAYS GONNA BE VERY, VERY TIGHT BECAUSE WE DON'T WANT TO, YOU KNOW, AGAIN, A LOT CAN HAPPEN.
SO, SO WE'RE GONNA GO, IT'S EXTREME, BE CONSERVATIVE AND AS CARLOS SAID, UM, WE'RE SEEING NOTHING THAT WOULD INDICATE ANY REASON TO, UH, EXPECT THAT BY THE SECOND QUARTER THIS DOESN'T HAVE A VERY, YOU KNOW, A GOOD CHANGE IN IN IT.
SO THAT'S NORMAL FOR US IN THE FIRST QUARTER.
AND BEFORE I CAME HERE, I DID LOOK AT WHERE WE ARE WITH OUR REAL ESTATE COLLECTIONS AS OF TODAY AND WE'VE COLLECTED 13%.
SO BY THE END OF THE WEEK WE'LL HOPEFULLY BE UP A LOT HIGHER THAN THAT.
THE LINE IS ALREADY FORMING DOWN THE TSUNAMI AND CASH WILL BE COMING IN THE TSUNAMIS.
ALRIGHT, ANY OTHER BUSINESS? SO LET'S NOW OPEN, UH, THE PUBLIC COMMENT PERIOD.
ANYTHING FROM THE PUBLIC COMMENTS? MR. SPAU? MR. SPAU? YES,
[01:00:01]
MR. CHAIR.THANK YOU GUYS FOR YOUR WORK ON, ON THIS COMMITTEE.
UM, I WOULD LIKE FOR YOUR CONSIDERATION, UH, BASED ON MR. VADER'S OBSERVATION OF I DO BELIEVE THAT THIS DECISION DOES NEED TO BE MADE FOR THE BUDGET THAT YOU WOULD CONSIDER POTENTIALLY HAVING A JANUARY MEETING AND POTENTIALLY MAKING IT A WORKSHOP SO THAT OTHER PEOPLE SUCH AS MYSELF AND MR. WILD CAN ATTEND AND, AND HAVE DISCUSSION.
UH, TWO THINGS THAT I'M MOST INTERESTED IN ARE WHAT HAVE WE DONE TO DATE TO TRY TO MEET THIS POLICY? UH, 'CAUSE I DON'T KNOW OF ANY ACTIONS THAT WE'VE ACTUALLY TAKEN TO ACTUALLY TRY TO MEET THESE GOALS.
AND THEN ALSO WHAT ARE THE RAMIFICATIONS OF, OF NOT MAKING IT.
WE, TO ME IT'S STILL VERY VAGUE ON, WELL WE HAVE MONEY IN A SCIENCE, SO IT'S GOING TOWARDS A PROJECT, WHAT DOES THAT ACTUALLY MEAN? AND JUST THE MECHANICS OF THE WHOLE THING AND HAVING AN OPEN DISCUSSION I THINK WOULD BE VERY VALUABLE.
SO I JUST WANTED TO THROW THAT OUT THERE.
AND I THINK, YOU KNOW, HAVING LEARNED A LOT TODAY, UM, IT WOULD MAKE A WORKSHOP MORE MEANINGFUL, MEANINGFUL THAN THE FACT I WOULD UNDERSTAND A LOT MORE WHAT WE'RE GETTING INTO.
TYPICALLY OUR JANUARY MEETING IS VERY LIGHT BECAUSE IT'S JUST OUR ORGANIZATIONAL MEETING.
SO IF WE HAD IT BEFOREHAND, BEFORE THE JANUARY MEETING, IT MAY BE, MAYBE IT WILL WORK WELL INTO THE SCHEDULE.
WELL, ANY FURTHER PUBLIC COMMENT, I'LL CLOSE THE PUBLIC COMMENT HERE TO THIS MEETING AND ALSO MAKE A MOTION TO, I GUESS, MODIFY OR RESEND THE PRIOR MOTION AS TO WHEN WE WERE GOING TO MEET AND, AND DECIDE ON THIS.
AND, WELL, I THINK THE MOTION COMPLETE, WE CAN LEAVE THAT.
WE CAN HAVE THIS WORK SESSION.
I'LL MAKE A MOTION, HAVE A WORK SESSION PRIOR TO THE, THE REGULAR BOARD CIVILIZED MEETING IN JANUARY 2ND.
ANY FURTHER DISCUSSION? GOT A MOTION.
DO YOU WANT KEVIN RODDY TO ATTEND THIS OR JUST MAKE IT AN INTERNAL DISCUSSION EITHER WAY AS WELL? WHAT DO YOU SAY? NO, I MEAN, I'M CLEAR ON THE POLICY.
YEAH, I MEAN, UH, HE COULD BE AVAILABLE TO CALL IN IF WE NEED HIM.
AND THEN WE JUST KIND OF HAVE HIM AND IF NEED HIM, DO WE HAVE HIM ON RETAINER? WE ON HOURLY BASIS WHEN THEY COME IN AND ALL THAT, HE IS ON RETAINER.
YEAH, LET'S UH, CALL THE COMMITTEE.
IF THERE'S NOTHING MORE FOR THE GOOD OF THE CAUSE, WE WILL, I HAVE A MOTION TO ADJOURN.
SECOND, I MADE A, I WAS SUPPOSED FOR A MOTION.
A, I MOVED YOU SECOND AND ALL PEOPLE SAY AYE MEETINGS, ADJOURN.